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Dan Shapiro: That's where cannabis is a tad unique, because with any 50, 60, 70-year-old industry, for the most part you're going to have a pretty good idea of what you can and can't do. Bryan Fields: What's up guys, welcome back to another episode of The Dime. I'm Bryan Fields, and with me as always is Kellen. This week we've got a very special guest, Dan Shapiro, EVP at Ascend Wellness. Dan, thanks for taking the time — how are you doing today? Dan Shapiro: Thanks, thanks Kellen — great, how are you guys doing? Kellen: Excited to have you, Dan. I'm doing really well, excited to talk to Dan and dive into Ascend's whole portfolio, and really excited to get the legal take on an MSO that operates in a bunch of different states in this highly regulated industry. But more importantly, how are you doing, Bryan? Bryan Fields: Yeah, I'm stoked. I think we're going to have a fun and insightful conversation with Dan — wondering how to balance understanding the gray areas of this industry with what's possible, while also understanding that as a large, publicly traded MSO there has to be a fine balance in decision-making. But before we get into it, I think it's super important to settle this — East Coast or West Coast — Dan, where do you reside? Dan Shapiro: So I'm a little interesting — I was actually born in Los Angeles, my mom is from LA. I moved to New York when I was four, grew up in New York City, and currently live in Florida. So a little bit of a mix — I'm certainly an East Coast person, but I do have a little bit of a West Coast vibe. Bryan Fields: I should have set the question a little differently to avoid that — we're just going to have to cut that first part. Dan Shapiro: No — born in LA, my mom grew up there and lived there till she was 40, so a little bit of LA ties, but I'm a New Yorker through and through for the most part. Bryan Fields: We're gonna have to flip that first part. All right, cool — so let's get a quick background about you and how you found your way to the cannabis space. Dan Shapiro: Yeah, absolutely. From a young age I knew I wanted to be a lawyer, wasn't sure if it would be through a political lens or a criminal justice lens. I did a number of internships in high school in litigation and trial work — I worked for the Manhattan District Attorney's Office in their high school internship program under the last year of DA Robert Morgenthau, took a child advocacy course at Columbia University, worked mock and real cases in the federal Brooklyn courthouse, and really thought I was going to go down the path of prosecutor or defense attorney. Needless to say, there was a ton of overlap with the war on drugs, particularly being in New York City, and I ultimately decided that while I loved it, I didn't think I wanted my whole life to be centered around someone's worst day. So toward the end of high school and beginning of college I shifted toward sports and politics. I went to George Washington University in DC, did data-focused political internships, and then worked for a sports marketing organization that did a lot of work with Vine — basically a precursor to TikTok — and with Red Bull and other extreme sports brands. Politics was getting a little heated at the time, so I leaned into sports and ended up at Cardozo Law School in New York focusing on sports and entertainment law. I worked for Roc Nation Sports, Jay-Z's sports agency, as in-house counsel throughout law school, was president of the Sports Law Society, and joined the ABA's Forum on Sports and Entertainment Law. I then joined a private equity firm in Miami — my wife is an entrepreneur and started a business there, so we relocated — and did sports and entertainment work but also a lot of esoteric asset classes: insurance, aviation, healthcare — things that set the stage for cannabis. From there I moved back to full-time sports at CAA, a large talent and sports agency, working for their Chief Legal Officer in the sports group. After everything I'd done — highly regulated industries, sports and entertainment, criminal justice, politics — I realized cannabis combined it all. I'd always been a cultural consumer of cannabis — my dad's in the music business, my mom's from LA, it was always pretty open in my household — but I didn't think of it as a business until early 2018, when I connected with the general counsel of a company called Green Lane. We hit it off, I moved to Boca Raton where the company was headquartered, and I was excited to combine my experience while entering an industry with a ton of upside — not just financial upside, but upside in growth and opportunity. Bryan Fields: I love it, I can see the direction of how you ended up in the cannabis space. So let's get into your current role — at a high level, would you say you're firefighting current issues, or more proactively looking ahead to adjust efforts before incidents occur? Dan Shapiro: It's a mixture of the two. I'd say the general sentiment of any in-house counsel — not even limited to cannabis, but certainly accentuated by this industry — is that no day is really the same. It's a matter of prioritizing certain matters from a prospective lens. You want to focus on key initiatives, but as they say, man makes plans and God laughs — you can have a day or week set aside to handle a larger initiative and things will still pop up. Bryan Fields: Take us through Ascend as a whole, so listeners unfamiliar with it can get a quick background, and then we can get into specifics about your role. Dan Shapiro: Absolutely. Ascend is a vertically integrated multi-state operator in seven states currently, with 39 retail locations and multiple cultivation sites. We do a bit of everything — large retail presence, house of brands, 2,000-plus employees, publicly traded on both US and Canadian exchanges. We cover pretty much everything you can think of for a multi-state operator, with the exception of international or Canadian sales. Bryan Fields: Speaking of different flavors, every state has its own version of this industry. Of the seven states Ascend operates in, which one do you spend the most time firefighting in, and which do you find most pleasant from a legal landscape? Dan Shapiro: I wouldn't say any state stands out as harder or easier. States where we have a larger presence just have a larger surface area for both positive developments and potential issues — more employees means more potential labor and employment matters, more agreements executed at the state entity level means more opportunity for negotiation and issues. So it's not that one state is difficult and another easy, it's that higher volume of economic activity in a state just means more attention. Bryan Fields: From a team level, is it you and people who focus on specific states, or is it divided differently? Dan Shapiro: Our legal team is relatively small — three lawyers currently, a corporate paralegal, and a compliance team. Our legal presence isn't state-limited; we divide responsibilities by type of law and type of work, not by state. I know other MSOs sometimes divide state by state, but I think in-house lawyers typically like to divide by subject matter, even though that subject matter can overlap multiple states and countries. Bryan Fields: Can you give an example of that subject matter division? Dan Shapiro: Sure — securities work, dealing with being a public company and corporate governance and board matters; labor and employment, ranging from terminations to improvements to the handbook and learning and development; classic M&A, negotiation with counterparties, document drafting, organization of disclosure schedules — and running through all of it, keeping specific state regulations in mind for any deal. Bryan Fields: Is your team more of a sounding board for issues that come up — like in employment — where it's "solve this," or do you also have the ability to craft the macro system that created the situation in the first place, as a proactive approach? Dan Shapiro: Yeah, absolutely, and that applies to all legal issues that emerge within the company. There are a number of things that are cases of first impression for us — because we've only been around a few years, because the industry is new, or because it's just an idiosyncratic issue we haven't seen before. Legal plays a role both in addressing it and in fixing whatever part of the system isn't addressing that problem. Sometimes it's a legal solution, sometimes it's a business solution, and I think most in-house counsel are empowered to problem-solve in that way. Bryan Fields: What happens in the gray areas that are subjective — does personality and dynamic come into play, like one person being more conservative and another more aggressive in interpretation? Does that become a cannabis-specific conversation? Dan Shapiro: I'd say part of it is cannabis-specific and part isn't. Starting with what isn't cannabis-specific — any in-house lawyer needs to understand the communication style of the business leaders they work with, their business goals, the company's macro goals, and their risk tolerance. That's true in any industry. The number of conversations involving gray areas is certainly more prevalent in cannabis, though my experience in aviation and insurance was good prep for this. It really comes down to the significance of the business ask and where in the gray area you're looking. Good lawyers balance conservatism with understanding, on a sliding scale, the priority of the business ask, and give an answer that keeps them comfortable while still serving the business interest. Sometimes I have no problem with something that looks gray; sometimes the honest answer is "this can't be done." I think you go from good lawyer to great lawyer when you can say "no, but" and offer a solution that gets at the underlying intent of the proposal while removing the part that makes you uncomfortable. Bryan Fields: That's so hard to balance — the law as written says one thing, but based on the industry's framework, some elements are probably fine and others aren't. Is that the approach? Dan Shapiro: Yeah, I think so. What's tricky about cannabis is there's not a ton of precedent — I don't mean case law literally, I mean that in most other industries, any regulatory issue has usually been dealt with before, with some determination on whether it's kosher or not. What's tough for a lot of cannabis lawyers is that when people hear "gray," they assume you're heading into something unacceptable. I view it differently — in an industry like cannabis, a lot of the regulations themselves are gray, and a lot of requirements are ambiguously phrased or have been inconsistently interpreted by regulators in the past, requiring an additional legal and compliance look. That's where cannabis is a tad unique, because with any 50, 60, 70-year-old industry, you're going to have a pretty good idea of what you can and can't do. Bryan Fields: It's like trying to hit a moving target — a constantly shifting regulatory landscape. How much do you lean on forecasting — like, this path makes sense if X happens in two years, but is the wrong path if it doesn't? Dan Shapiro: For anything involving large-scale capital allocation, you have to be forward-thinking and anticipate potential regulatory changes as much as possible. One thing Ascend is fantastic at is allocating capital responsibly and in a disciplined manner — that's been the company's calling card since inception. You can't do that in this industry without making educated guesses. There are people smarter than me at the lobbying and government affairs level who can give insight on things like Schedule III and state regulatory conversations in Pennsylvania, Florida, and elsewhere. A lot of it is synthesizing information that's been roughly 50/50 over the last few years into a disciplined internal plan, while factoring in the potential negative outcome of what you're planning for. Bryan Fields: What comes to mind for me is the farm bill and hemp-versus-cannabis conversation — it's interesting to watch Boris Jordan at Curaleaf take that approach. Does that kind of thinking resonate with smaller MSOs like Ascend — like, "if Boris is doing this, we can slide in behind him"? Dan Shapiro: I won't speak to how the business views that specifically, but from a legal perspective we're always looking at everything relevant to the business, and anything tied to hemp and the farm bill — you have to be aware that farm-bill-compliant product regulations, and the relative lack of regulation around non-farm-bill-addressed products, could be completely flipped on its head in the next 12 to 18 months. All of that has to be considered when deciding whether to enter the space. Bryan Fields: From a philosophical perspective, what are your thoughts on the emergence of the hemp industry alongside the highly regulated cannabis space? Dan Shapiro: Speaking only for myself, not Ascend — I'm in favor of the entirety of the hemp and cannabis industry being legalized and regulated to create safe, affordable, accessible products for consumers. I'm not a fan of the level of fragmented regulation, or lack thereof, in the industry, but that's not a judgment on the businesses or the states — it's the outcome of federal inaction. At its core, I think all these products should be regulated safely and consumers should be able to purchase them, but the way it's being handled at the moment isn't perfect. Bryan Fields: That's where it gets so difficult — you set up an extremely complex, gray system, split the industry in two, and people develop unique strategies to work within the gray rules, and then get called shady for it, when really they're just following the rules the best they can. If you were in DC, would you push for simplifying the approach? Dan Shapiro: I think everyone in the industry should be as united as possible, because we're seeing what can happen in Washington, particularly with this new administration, when other industries are more united than cannabis has sometimes been. There are unique reasons for different factions within the industry — hemp-compliant products are a very different business than adult-use or medical cannabis, and then there are synthetic products in different states too. My message to Washington would be: make as broad an effort as possible to legalize and safely regulate the plant, and let the labs, companies, and distributors who've been doing this for years continue, but under one clear set of rules applicable to everyone that protects the consumer. Bryan Fields: Is there scenario planning internally — like, if the farm bill changes this way, or if there's an executive order legalizing cannabis, here's what we do? Or does the business chart its course and legal steers once laws are written? Dan Shapiro: It depends. There's a continued effort on my end to learn and stay on top of regulatory changes at the state, federal, and international level, and similarly the business side is always looking at changes in available form factors, new product lines, and so on. It's less about a formal "legal does this, business does that" split, and more a continual revolving door of everyone looking at the present and the future, trying to understand what the next 12 to 18 months could look like. Bryan Fields: As a vertically integrated organization, when you look at other industries, do you say "our strength is cultivation, so we can afford to dip our toe into new things there," or is expansion strictly driven by which regulatory environment is safest to experiment in? Dan Shapiro: First and foremost, Ascend has always tried to give the consumer what they want, and then cater to what we've demonstrated we're good at. We've done creative things like the outlet model — we were the first cannabis MSO to do that — and we have lower, mid, and higher-end luxury product tiers. Those are skills we developed in response to what we saw consumers wanting. For example, we have the number one flower brand in Massachusetts, and we launched a new effects-based edibles line after seeing what the industry and consumers wanted. Bryan Fields: Do marketing claims behind something like that effects-based line get run past your desk, or is that more the regulatory team? Dan Shapiro: It's a combination of my team and compliance, and it's different in every state — state-specific labeling, marketing, and packaging all run through legal and compliance. Bryan Fields: Are there form factors that require a heavier lift for your team — beverages needing more safety labeling versus gummies versus pre-rolls? Dan Shapiro: Not really from a legal perspective, though it might be different for the ops team. There might be a few additional regs to read through when something is newly allowed in a state, but I wouldn't call that form-factor specific — it's more about opening a new avenue in a state and making sure compliance, legal, and marketing are all aligned. Bryan Fields: What area is the most surprisingly difficult, complicated, or frustrating? Dan Shapiro: What's frustrating is the general fluidity and stop-start nature of state and federal regulations — not frustration with any individual or state, but lawyers like to be methodical and have systems set up to be compliant a certain way, and then something changes and we have to redo it. There aren't many industries with this level of legal and regulatory fluidity. Bryan Fields: Do you see a future where all the states harmonize their regulatory approach — like if federal legalization happened tomorrow? Dan Shapiro: I'll give you a bad podcast answer — I have no idea. I don't think anyone can give a well-sourced educated guess on where the industry will be in five or ten years. In the near term, I think the government would likely defer to state markets that have been successful, largely because they wouldn't want to take on that burden right away — but that's just a guess based on statements from people like RFK and from Trump on rescheduling. It's tough to know whether it mirrors a state-run system like Pennsylvania or Alabama for alcohol, or a more open system like New York City liquor stores. Bryan Fields: It's probably impossible to know, especially given how the hemp industry exploded faster than anyone expected, and now MSOs like Curaleaf are pushing into hemp, which is pushing the pace on figuring out the farm bill alongside rescheduling. It really is being prepared for the unprepared. Dan Shapiro: You just have to have multiple avenues to proceed. My wife and I joke — I have a two-year-old and a seven-month-old, and taking both out for three or four hours means being prepared for a bunch of different situations — one's upset, one's hungry, one's tired. This industry is the same: you need four or five different options that balance being detailed, meticulous, cost-efficient, and flexible. If you're too rigid or too flexible, I don't think you succeed in this industry. Ascend has done a good job staying disciplined — focusing on densification in current markets rather than expanding as rapidly as some other companies, and focusing on new form factors the customer actually wanted rather than novelty for its own sake. Bryan Fields: Has your team implemented any creative solutions based on the way a rule or regulation was presented? Dan Shapiro: I wouldn't say there are systems in place that look different from a well-oiled compliance and legal department — people just have to think about things differently than in other industries because of the regulatory language. That doesn't apply to securities law or corporate governance, which I'd handle the same way if I were selling sneakers or any other CPG as a public company. Everything specific to cannabis is really at the state and product level. Bryan Fields: What about balancing external counsel — is that a resource Ascend uses? Dan Shapiro: Huge resource. A great in-house lawyer knows what the business wants and can provide solutions, but another mark of a great in-house lawyer is knowing what you don't know. Lawyers are a bit like doctors — you have a JD, you have experience, but I'm really a corporate and regulatory generalist at this point, and recognizing where I lack expertise is paramount. We use outside counsel for all forms of litigation — in-house lawyers typically don't litigate for their own company, partly because litigation is its own particular skill set, a bit like a surgeon versus a diagnostic doctor, and partly because of state-specific requirements for certain matters, whether cannabis-related, labor and employment, or arbitration. We have a great team of outside counsel that I manage across a number of topics. Bryan Fields: How do you balance your time managing multiple cases with outside firms while also handling everything else internally? Dan Shapiro: First you need a good internal support system and staff — our licensing team, paralegal, and other lawyers are fantastic. You also want some internal system for tracking matters, like any SaaS company would use, so you always understand what's going on across your team. Then it comes back to prioritization — some matters are 12-to-18-month issues that don't need close weekly attention, while others are 14-to-28-day sprints on a deal or transaction where you're working closely with outside lawyers. It's a mixture of internal organization, team management, and understanding business priorities. Bryan Fields: Has anything about being in the cannabis industry surprised you? Dan Shapiro: Two things. One is the sophistication of the people in the industry from a business perspective — cannabis gets a bad rap sometimes because of how difficult it is and some public stories about companies over the last five to seven years, but the business sophistication I saw at Green Lane and then Ascend wasn't what I expected given how outside observers talk about the industry. The second is just how difficult it truly is. I didn't anticipate the vape issues when I entered in May 2019 — I worked for a large vape distributor during the EVALI crisis, which was ultimately driven by illegally obtained product but still impacted our business, even though we were NASDAQ-listed and fully legally compliant. Then came COVID, a huge boom in our products and distribution, followed by state-by-state and city-by-city limitations on flavored vape products, both hemp and nicotine. Then at Ascend, everything that's happened in the industry the last couple of years. Everyone talks about how difficult this industry is, but it's truly hard to understand how hard it is until you're in it. Bryan Fields: What question do you wish more people asked you? Dan Shapiro: I think people are often focused on federal legalization questions, and what I'd want more people to ask about is the vibrant business that exists today in the states we operate in — not just us, other MSOs too. It's easy to focus on the federal scheme and what the future might look like, but there are amazing, incredible state-compliant businesses operating right now that people sometimes lose sight of. Bryan Fields: Is there one state in particular you were thinking of? Dan Shapiro: Honestly, no — all the states we operate in have gone through a lot of positive change over the last four or five years. Ohio turned adult-use, there's optimism about Pennsylvania's future, we've been growing in Illinois and Massachusetts for years. Every state and every cannabis business has pros and cons relating to the broader federal climate, but there are cool stories at the state level in every one of them. Bryan Fields: Last light one — dream smoking session, three people dead or alive? Dan Shapiro: Thomas Jefferson, Elvis Presley, and Tiger Woods. Bryan Fields: I was wondering if you'd sneak an athlete in there at the end. Dan Shapiro: I always have to sneak one in there. Bryan Fields: One year from now, what has changed? Dan Shapiro: I think we'll have a lot more clarity on Schedule III — and I use the term clarity not necessarily to prognosticate yes or no, but I'd be very surprised if we're similarly in the dark a year from now as we are today. Bryan Fields: Great answer. All right, last question, Dan — is there a particular loophole, regulation, or legal gray area that keeps you up at night? Dan Shapiro: It's actually the easiest answer, right in front of us — our business is federally illegal. I think that's probably the answer for every in-house cannabis attorney. None of us think there's any legitimate risk of federal enforcement for a variety of reasons, but that's the biggest risk to all these businesses. There's been a ton of chatter on cannabis social media the last few days around debanking, which emanated off the crypto conversation. These are businesses and individuals who've done nothing wrong, complied with every state-specific regulation required, but our business is federally legal until it's not. Bryan Fields: Wild balance. Dan, for our listeners who want to get in touch and learn more about Ascend, where can they find you? Dan Shapiro: You can find me on LinkedIn or Twitter, Dan M. Shapiro, and Ascend — just Google Ascend Wellness, great website, takes you to all our stores and investor materials if you're interested in our public filings. More than welcome to message me on LinkedIn too. Bryan Fields: Thanks for taking the time, this was a lot of fun. Dan Shapiro: Yeah, absolutely — thank you both, really appreciate it.